With the assassination of Benazir Bhutto, one of Pakistans foremost opposition leaders, the bottom fell out of the Bush administrations already creaky policy toward that South Asian nation. The administration had hoped that Bhutto would return to a country in turmoil and take the position of prime minister to give presidential dictator Pervez Musharrafs government some popular legitimacy. Instead, Bhutto went into an opposition mode and then was assassinated. Unfortunately for the administration, Bhutto was one of the few genuinely popular politicians in Pakistan and has no viable replacement. The assassination cut in half the administrations policywhich was tied to supporting particular personalities, such as Bhutto and Musharrafleaving only the propping up of the shaky dictator.

The reason given for continued U.S. backing of Musharraf is his alleged support for the U.S. war on terror. He has made some effort to go after al-Qaeda operatives and Islamic radicals in northwest Pakistan. But Musharraf has a big incentive to keep the most prominent people in those groups free. As long as Pakistans army, the most powerful political force in the country, can be seen to be fighting, apprehending, or killing these important remnants, heavy amounts of U.S. military aid will continue to flow. Pakistan already saw U.S. aid evaporate in the 1990s after the United States Soviet arch-rival withdrew from neighboring Afghanistan. The Pakistanis know better how to play the game this time around.

There is a key to the puzzle of Pakistan: of the $10 billion the United States has given to that nation, the Pakistani government has diverted significant amounts to buying weapons to shore up the Pakistani militarys position against India, its chief rival. So Musharraf and the army have every incentive to fight al-Qaeda and the Islamists but never eradicate them.

The military aid is fueling an arms race between Pakistan and India in what most experts say is the conflict in the world most likely to lead to nuclear war. (The United States is also unwisely fueling the conflict from the other side by selling conventional arms to India and will very likely indirectly help India with its nuclear weapons program, should the U.S.-Indian pact on nuclear cooperation be approved.)

Some in American policy circles have advocated making U.S. aid conditional on the Pakistani governments making more progress on fighting the Islamists or making democratic reforms. Instead, U.S. aid to Pakistan should be cut off. (Arms sales to India should also be stopped and the U.S.-Indian nuclear agreement scrapped.) Like continued U.S. and NATO occupation of next door Afghanistan (perceived as infidels oppressing a Muslim land), the close association of the Pakistani government and the U.S. superpower has fueled the Pakistani Islamist insurgency. Ending U.S. aid would substantially lessen that inflaming bilateral relationship.

Furthermore, counterintuitively, the aid cutoff would likely increase Musharrafs incentive to go after the Islamists. The Islamist insurgency is growing stronger, as its spilling out of the northwest tribal areas and the Bhutto assassination indicates. Musharraf and the Pakistani military would have every incentive to try to exterminate the insurgency before it destabilizes Pakistan. Conversely, they would no longer need to keep prominent Islamists free to keep U.S. aid flowing, because it would have been terminated.

Make no mistake, the United States has an interest in seeing the Islamists defeated, because they harbor and assist al-Qaeda and because, in the worst but unlikely case, they could take over a nuclear-armed nation. If the United States cant help itself and wants to do something proactiveand much more productive than the counterproductive military aidto stop the Islamists, it should further substantially hike the bounty on the heads of Osama bin Laden and Ayman al-Zawahiri from the current $50 million and $25 million, respectively. Such a reward has the best chance of getting a tip on their whereabouts at a very low cost compared to the ill-spent billions on aid and the normally incompetent U.S. intelligence agencies. Anyone providing such a tip could also be offered safe passage out of Pakistan and protection for life.

Of course, U.S. covert action and Special Forces raids could be used if the Pakistani military was unable to undertake a raid to take advantage of any tip. The U.S. could also continue to help Pakistan secure its nuclear weapons. Progress has already been made in training elite troops to guard them and to store warheads and detonators separately. Some evidence exists that the U.S. is already attempting to increase such nuclear security help and the activity of U.S. covert and Special Forces.

The United States should be less concerned with whether Pakistan becomes a democracy. Democracy is less of a precursor to the Pakistani governments ability to fight al-Qaeda and the Islamists than is commonly perceived. Nevertheless, the billions in aid only shores up anti-democratic forcesread the Pakistani military. Like the perverse effect U.S. aid has on the Pakistani governments incentives to eliminate the Islamists, proactive U.S. efforts to promote democracy may actually undermine it. Democracy may become discredited because it has been associated with the meddling superpower. Thus, with both aid and democracy promotion, U.S. policy should first be do no harm. Doing less in both cases is likely to get better results.

Ivan Eland is Senior Fellow and Director of the Center on Peace & Liberty at the Independent Institute. Dr. Eland is a graduate of Iowa State University and received an M.B.A. in applied economics and Ph.D. in national security policy from George Washington University. He spent 15 years working for Congress on national security issues, including stints as an investigator for the House Foreign Affairs Committee and Principal Defense Analyst at the Congressional Budget Office.